POLITICS AND POLICY
The Greek bail-out negotiations are back under the spotlight. On Monday, the Eurogroup met in Luxembourg to discuss the release of a new financial aid package of €2.8 billion to Greece in the framework of the third bailout programme. On Monday morning, EU Commissioner Moscovici stated that Greece delivered the necessary reforms to unlock the funds. However, by the end of the meeting, the Financial Ministers of the Eurozone decided to disburse only 1.1 billion euros. A second instalment was made conditional upon the delivering of new economic data by the Greek government before the end of this month.
The partial support of the Eurogroup came in handy as Alexis Tsipras’s government is putting at stake all its political credibility at home by following through on the austerity course dictated by international lenders, in a bid to start discussions on potential debt relief in 2017. However, the Greek Labour minister said that the government is not willing to follow through on the labour market reforms required by the IMF. To make matters worse, Greece has been hit by several strikes across private and public sectors over the past few weeks.
Moreover, over the last few days, doubts have been cast on the involvement of the International Monetary Fund (IMF) in the ongoing bailout program. On Sunday, two senior sources revealed that the IMF will exclusively hold an advisory role in the future of the Greek crisis management, Ekathimerini reports. The IMF’s decision is apparently due to divergences with Germany over the evaluation of the sustainability of Greece’s debt. Indeed, Christine Lagarde, the IMF’s director, is a longstanding advocate of debt relief for Athens, whilst Germany’s Finance Minister, Wolfgang Schäuble has always been a staunch opponent of any such measure.
In other news, the Brexit debate continues to make the headlines in the UK and across Europe. On Monday, the Sterling dropped again with respect to the Euro and the US Dollar. Similarly, the Bank of England’s trade-weighted index hit its lowest level since 2009 because of worries linked to the country’s exit from the European Union. Former Home Secretary Ken Clarke, blamed the UK government for the economic havoc, arguing that it raised only uncertainty about the prospects of Brexit negotiations.
However, last week, on the occasion of the general conference of the Conservative party, in Birmingham, Theresa May tried to lay down the building blocks of Britain’s post-Brexit politics. May’s final speech winked at right-wing populist forces, such as UKIP, in a bid to gain popular sustain for the Conservative party. May called for a new way of doing politics that takes into account the “needs of the majority” and where the state steps in to mitigate the failures of free markets. More importantly, on the same occasion Amber Rudd, the UK’s Home Secretary, revealed government plans to draw up lists of foreign-born employees working for British companies and Universities. Although the policy has been backed by a majority of British citizens, it received harsh criticism from businesses. On Monday, Education Secretary Justine Greening clarified that these lists won’t be made public and used strictly for policy making.
Even the Labour party, however, supports immigration control policies. On Sunday, shadow Brexit Secretary Keir Starmer, said that immigrations level are too high and that he would back some sort of adjustment on the issue. However, his statement is at odds with the official position undertaken by Labour’s leader, Jeremy Corbyn, who defended the principle of free movement within the EU. On October 8, the general director of the Confederation of British Industry (CBI), Carolyn Fairbairn, warned Theresa May not to follow through on a hard-Brexit option. In particular she called for the UK not to be fall back on basic tariff arrangements under the World Trade Organisation (WTO). However, across the Channel, European leaders said that there is no room for special agreements. On Friday, both European Commission President Jean Claude Juncker, and the French President Francois Hollande, stated that “the EU needs to be intransigent” when it comes to Britain and Brexit negotiations.
“There is a profound inter-generational unfairness that has been created by this [housing] policy over a number of years. I have got a nice home, I have got three kids and my mother has just disinherited my brother and I in order that she can pass her assets on to her five grandchildren. They will be OK”.
Gavin Barwell, Housing minister of the UK
Source: The Independent, 10.10.2016
“Shutting the frontiers for a day would show people what it means to wait two hours to get into Italy or Spain […] It’s terrible what I’m saying, but it would be good for people to understand”.
Xavier Bettel, Prime Minister of Luxembourg
Source: EuObserver, 10.10.2016
The years EU migrants need to live in Germany before being entitled to receiving financial assistance under the so-called HartzIV welfare scheme, according to a new bill drafted by the German government.
Source: Handelsblatt, 7.10.2016
The percentage by which the German social expenditure increased on a yearly basis between 2014 and 2015.
Source: Süddeutsche Zeitung, 10.10.2016
Photo Credits CC International Monetary Fund